In the insurance industry, an insurance policy is proof of a contract between an insured and an insurer. When a customer makes a claim and an insurer accepts it, the five basic requirements for a legally valid contract must be met. Here`s an example of how legal considerations count as one of the five requirements. A party that is already required by law to provide money, an item, a service or leniency will not provide any consideration if it simply promises to comply with this obligation. [32] [33] [34] This legal obligation may arise from the law or from an obligation arising from a previous contract. Legal counterpart refers to the exchange of two or more things of value in a legally binding contract. Typically, the money or currency in these contracts is exchanged for some type of goods or services. For a contract to be valid, it must be taken into account. Civil law systems assume that an exchange of promises or a simultaneous will alone and not an exchange of valuable rights is the correct basis. So, if A promises to give B a book and B accepts the offer without giving anything in return, B would have a legal right to the book and A could not change his mind about giving it to B as a gift.
In common law systems, however, the concept of culpa in contrahendo, a form of confiscation, is increasingly used to create obligations in pre-contractual negotiations. [27] [28] Forfeiture is a doctrine of fairness that provides for the creation of legal obligations when one party has given assurance to another party and the other party has relied on the insurance to its detriment. If a legal contract contains no consideration, a court may intervene and declare the contract unenforceable. It could happen: Consider the above situation of the uncle. If the same uncle had instead made his 13-year-old nephew the following offer: «If you don`t smoke cigarettes, drink alcohol, curse or play cards for money before your 21st birthday, I`ll pay you $5,000.» On the nephew`s 21st birthday, he asks the uncle to pay, and this time the nephew can win in the next trial. [35] Although the promise not to drink alcohol or gamble before the age of 21 was not a valid quid pro quo (it was already prohibited by law), most states allow smoking at 18 and swearing, while some consider vulgar not illegal at any age. Although smoking is prohibited by law until the age of 18, it is legal for people over the age of 18, and therefore the promise to abstain from it has legal value. However, the uncle would still be exempt from liability if his nephew drank alcohol, although this consideration was worthless because it was combined with something of legal value; Therefore, compliance with the entire collective agreement is necessary.
«CONSIDERATION (according to lat. consider, look carefully, investigate, generally seen from con- and the basis in Sidus, sideris, a star, the word originally intended to be an astrological or astronomical term), observation, attention, consideration or consideration, hence the fact taken into account, and especially something given as equivalent or reward or as payment; in contract law, an act or omission or promise thereof offered by one party to an agreement and accepted by the other as an incitement to the act or promise of that other (Pollock on Contract). Consideration in the legal sense is essential for the validity of any contract, unless it is made in writing under seal. The meaning of the word is quite well expressed by a phrase used in one of the first cases on this subject – it is, strictly speaking, a quid pro quo. Something, whether it is an act or an abstention, must pass from one party to support a promise of the other. A simple promise by A to give something to B can only be fulfilled if it is envisaged to «move away from B». Although any contract must be considered, it is decided that the court does not question its reasonableness, but must have some value in the eyes of the law. It must also be legal, and it must be present or future, not in the past. See other contracts. Legal considerations are something of value structured in a legal contract. For a contract to be valid, both parties must normally have a «consideration». If one party has consideration and the other does not, the contract cannot be upheld if it is challenged in court.
In other words, both parties must agree to do something, regardless of size, in order to be able to reach a legal agreement. The consideration is an essential element for the conclusion of a contract. It can be a promise to take a desired action or a promise to refrain from an action to which one is legally entitled. In a bilateral treaty – an agreement whereby both sides exchange promises to each other – each promise is seen as sufficient quid pro quo for the other. In a unilateral contract, an agreement by which one party makes a promise in exchange for the performance of the other, performance is the consideration for the promise while the promise is the counterpart of the performance. Generally, courts do not consider whether the agreement between two parties was monetarily fair, but simply whether each party imposed a legal obligation or duty on the other party. [29] [30] The overriding issue is the existence of consideration, not the adequacy of the consideration. The values between the counterparties provided by each Contracting Party need not be comparable. Contracts in which a legally worthless clause is accompanied by a legally binding clause are in principle always enforceable. Modern courts have placed less emphasis on the distinction between unilateral and bilateral treaties. Those courts have held that an offer may be accepted either by a promise of performance or by actual performance. An increasing number of courts are concluding that the traditional distinction between unilateral and bilateral treaties does not significantly advance legal analysis in an increasing number of cases where enforcement extends over a longer period of time.
n.1) Payment or money. (2) As an essential element of contract law, consideration is an advantage that must be negotiated between the parties and is the essential reason for the conclusion of a contract by a party. The consideration must have value (at least for the parties) and is exchanged for performance or promise of performance by the other party (this performance itself is consideration). In a contract, a consideration (given thing) is exchanged for another consideration. Not doing an action (abstaining) can be a consideration, for example: «I`m going to pay you $1,000 not to build a road next to my fence.» Sometimes the consideration is «nominal,» meaning it is only indicated for the form, such as «$10 in exchange for transfer of ownership,» which is used to hide the actual amount paid. Contracts may become unenforceable or cancelled (cancelled) for «non-compliance» if it is determined that the intended consideration is worth less than expected, damaged or destroyed, or that the service is not properly performed (e.g., if the mechanic does not operate the car properly). Acts that are so unlawful or immoral as to be contrary to established public policy may not be used as a counterpart to enforceable contracts.